Every time we drive south on I-25 from Santa Fe to the Mexican border, we pass northbound convoys carrying enormous blades for wind turbines and I think to myself, “This is what our relationship with Mexico should be. A free interchange of goods and services in a way that respects the different strengths of our two economies and one that is based on cooperation and respect.”
During the decade of the 1990s, I served as the Director of the Colorado International Trade Office, and we were one of the first states to push hard for the passage of NAFTA. Our belief was that this could lead to a three country – the US, Mexico and Canada – economic powerhouse. And we were grateful to Presidents George H W Bush and Bill Clinton for their support and leadership, especially Clinton who had to deal with many reluctant Democrats, members of my party but often very provincial on trade issues.
Canada and Mexico quickly became Colorado’s two largest export markets, rapidly outpacing Japan which had been the leader. Now Colorado exports three times more to these two countries than to China, its third largest export market. Mexico is even more important as an export market for New Mexico and Texas.
We also see this flow of trade at the ports of entry at Santa Teresa and Palomas where there are huge lines of trucks waiting to cross the border.
There’s a fierce competition for economic leadership with China today; therefore, building and protecting our three-country economic base is even more important. That includes persuading US companies that have invested in China to refocus their efforts on our continent.
Therefore, what about the tariff situation with Mexico? On July 31, President Trump extended his proposed tariffs for 90 days. In other words, until the end of this month. Less than two weeks from now.
Tariffs will obviously lead to higher costs for American consumers. But in the longer run, they destroy the working relationship and the sense of trust that is necessary to expanding international business. In my case in the 90s, building this trust, particularly for smaller companies, involved numerous trade missions and the development of personal relationships. How can that happen when there is the ongoing threat of crippling tariffs?
What will happen next? Will President Trump be too focused on issues in Gaza and his growing involvement with Venezuela to refocus on Mexico and this tariff issue?
In the meantime, look at what the polls say about Mexico’s President, Claudia Sheinbaum as she completes her first year in office. We spent several days in Mexico City prior to her election and interviewed dozens of people. The skepticism about her, her party and politics in general was overwhelming. Yet polls today give her approval ratings of close to 80%. These approval ratings are higher than any of the last four Mexican presidents achieved in their first years in office.
Much of this is due to the calm yet forceful way she has handled Trump’s demands. Much is also due to the enactment of new social programs like expanded scholarships for students, and support for women. Although she doesn’t get high marks for combatting cartels and corruption, she has achieved a 32 percent decrease in homicides nationwide.
In short, she is in a strong political position to stand up to President Trump again. His ratings are about 44%.
It’s easy to characterize this as just a struggle between the US and Mexico and overlook the strides China is making. One example is the research center in Shanghai that was built by Huawei, a huge company with over 200,000 employees and operations in 170 countries. According to New York Times columnist, Thomas Friedman who visited it last spring, it is the size of 225 football fields, has labs for as many as 35,000 scientists and technicians. This shows their commitment to economic and scientific leadership. We have nothing that compares to it. And we have no strategy to convince US companies that do business in China to make a shift to Mexico where the transportation costs are less, the cultural and language differences less, and a common industrial base already exists.
The new tariff deadline looms ahead of us. Let’s hope for a gentle landing but in the meantime, note that New Mexico has just opened a trade office in Mexico City. It seems like an odd time to do so with just a year left in Governor Michelle Lujan Grisham’s last term but it’s a valuable show of confidence in Mexico’s future.
Editor’s Note: The above guest column was penned by Morgan Smith, a freelance writer who travels to the U.S.-Mexico border at least monthly to report on conditions there. He can be reached at Morgan-smith@comcast.net.
